I use this feature all the time when the main living room TV is occupied, or if I want to watch sports or something on TV while playing Xbox, or if I want to play in bed before going to sleep at night. The only limitation is you can't play Xbox 360 or OG Xbox games via this method. So I can play Silent Hill, Wind Waker, Goldeneye 007, etc. You can even stream any of your emulated games via the Retroarch Xbox app. Plus, you can access your entire library of games, not just Game Pass / cloud gaming enabled ones.
With Xbox Remote Play, rather than reaching out to Microsoft datacenters dozens if not hundreds of miles away, you can stream directly from your own Xbox in your home. There's been a lot of chatter and focus on xCloud/Xbox Cloud Gaming, but I think a feature that many are overlooking is Xbox Remote Play.